TCA offloads $700m office portfolio

Wholesale property fund manager TCA Australia is advancing the carve-up of its five-strong portfolio of buildings across Melbourne, Sydney and Brisbane with the towers being sold to separate groups in deals worth more than $700 million.

The buildings are bring broken up among heavyweight international buyers, including US real estate funds house AEW Capital Management and CLSA Capital Partners, with local house AMP Capital and Australian Unity also in the frame for assets.

The sales, particularly in Melbourne, are likely to set fresh benchmarks for towers this kind, bolstering hopes of a strong finish to the year as more buildings hit the block, primarily in Sydney.

The impending sales show the depth of capital chasing a range of Australian assets at a time when Chinese mainland buyers have pulled back from big-ticket purchases and some are repatriating capital.

TCA in July put the properties, held in two closed-end funds on the block mid-year, and it won strong interest, but won the highest values by selling them off piecemeal to the highest bidders.

The portfolio is being handled by Mark Coster of CBRE and Rob Sewell of JLL, but they did not return calls.

The offer included Brisbane’s 150 Charlotte St, Sydney’s 50 Pitt St, and Melbourne’s 469 La Trobe St, 850 Collins St and 575 Bourke St. The Queensland asset drew interest from the local groups that have set the pace in Brisbane, with the 11,011sqm 150 Charlotte St tower being looked at by fund manager Australian Unity.

The tower sits in the city’s Golden Triangle and houses several major tenants, including Rio Tinto, and could sit well in the group’s listed fund, but the parties did not comment.

In Sydney, AEW Capital is looking to buy 50 Pitt St, a B+ grade asset completed in 1974 and refurbished in 2007 and 2008. The building near Circular Quay spans 9897sqm.

TCA bought it for $94 million in 2014 but it could trade for nearly twice this sum after being repositioned.

It also fit with the ambitions of the Boston-based investment group that last year bought a B-grade tower in nearby Clarence St for about $169m, but it declined to comment.

The Melbourne assets were considered the prizes of the portfolio.

AMP Capital, potentially acting for its Swiss Re mandate, has been linked to the 19,864sqm tower at 469 La Trobe St, that was promoted as offering a strong income growth due to the westward shift of the CBD towards Docklands.

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